On May 29, 1990 G. Alex Monteith, a Canadian citizen doing business in Toledo, Ohio, applied to register the mark shown below

on the Principal Register for restaurant services. [FN1] Although the application was based on applicant's stated intention to use the mark in commerce, it was subsequently amended to claim use in interstate commerce commencing on April 21, 1990. [FN2]

On February 25, 1992 a timely notice of opposition was filed by Metromedia Steakhouses, Inc., a Delaware corporation. As grounds for opposition opposer pleaded that since the 1960's it has operated restaurants featuring steak and seafood under the trade names and marks "BONANZA" and "PONDEROSA"; that opposer owns registrations of various trademarks and service marks which include these two words; that applicant is a former licensee of opposer who now competes with opposer; that following termination of the license agreement, applicant used opposer's marks without opposer's authorization or consent; and that "(a)pplicant's mark conveys a commercial impression confusingly similar to the commercial impressions generated by opposer's BONANZA and PONDEROSA marks, which in turn suggests that Applicant has the sponsorship of Opposer, when in fact he does not." (Notice of Opp., p. 5). Opposer goes on to allege that use and registration of applicant's mark "would tend to cause confusion or mistake...."

Applicant assigned the application to Pondco II, Inc., [FN3] which opposer claims exacerbates the likelihood of confusion. Opposer's theory on this point is that the assignee's use of "PONDCO" in connection with the mark "RANCH STEAK AND SEAFOOD" and design is likely to lead to confusion with opposer's "PONDEROSA" marks.

Opposer further claims that applicant, G. Alex Monteith, committed fraud by declaring himself to be entitled to registration and that he knew of no one else entitled to use the mark, when in fact applicant was aware that one Ruben E. Smith, who is not a party to this proceeding, has superior rights in the mark.

Opposer had moved for summary judgment on this ground on October 16, 1992. On November 9, 1992 applicant responded to opposer's summary judgment motion, cross-moved for summary judgment in its own favor, and filed a brief in response to opposer's motion for leave to amend the notice of opposition. Both summary judgment motions and the motion for leave to amend have been thoroughly briefed. We are thus faced with opposer's motion to amend its pleading and the cross-motions for summary judgment.

OPPOSER'S MOTION TO AMEND

*2 Opposer's motion for leave to amend the notice of opposition is granted. Opposer seeks to contend that the Board's decision sustaining Opposition No. 86,372 operates as res judicata to preclude applicant from registering the mark in the application at hand. Application Serial No. 74/051,890, filed April 23, 1990, was for a mark which showed "RANCH STEAK & SEAFOOD" in typed form for restaurant services. That application was opposed by this opposer, but the application was expressly abandoned by applicant, without the written consent of opposer, on February 21, 1992. The instant opposition was filed on February 25, 1992. The first opposition, Opposition No. 86,372, was sustained, as a result of applicant's abandonment, on May 14, 1992. Opposer's motion to amend to claim res judicata was filed in this proceeding on October 19, 1992, which was four days after the close of discovery.

Applicant argues that the motion to amend is untimely and that it fails to state proper grounds for opposition. Neither argument is persuasive.

Rule 15(d) of the Federal Rules of Civil Procedure permits supplemental pleadings based on events which have occurred since the original claim. Plainly such a situation exists in this case. The Board's ruling on the earlier opposition took place after the filing of the notice of opposition in the instant case; opposer could hardly have pleaded it before it happened. While we are not provided with any reason why opposer did not seek to amend to assert the proffered claim immediately after the Board's ruling in the first proceeding, permitting the amendment now would not be unfair, and applicant still has been accorded notice adequate to avoid being prejudiced thereby.

Applicant notes that the motion for leave to amend was filed only after discovery had closed. However, additional discovery as to the ground sought to be added to the plaintiff's claim should not be necessary, and neither party has requested additional discovery. The facts as to that application and that opposition would appear to be readily established by the record, and in any event they would surely be known to applicant.

Applicant charges that the proposed amended claim does not state proper grounds, but it is clear from applicant's argument that its contention is not that res judicata may not be asserted as a ground for an opposition, but rather that this ground is not supported by the facts in the case at hand. The issue presented by opposer's motion for leave to amend is not whether opposer should prevail on the ground set forth, but instead it is whether opposer should be allowed to assert such ground.

Because the proposed amended claim is not untimely and does set forth a claim for which the requested relief may be granted, the amendment to the notice of opposition is accepted. Our evaluation of the merits of opposer's claims is discussed below, however.

OPPOSER'S SUMMARY JUDGMENT MOTION

Opposer seeks summary judgment based on res judicata as well as on the pleaded issue of fraud. Opposer asserts that no facts material to these issues are disputed, and that based on the undisputed facts, as a matter of law, the opposition should be sustained.

*3 Submitted in support of opposer's motion are applicant's earlier-filed application; the notice of opposition which opposer filed against it; applicant's express abandonment of that application; the Board's entry of judgment against applicant because the abandonment was without opposer's consent; applicant's discovery responses; photocopies of entries from a dictionary, telephone directories and chain restaurant directories; the declarations (with exhibits) of Evelyn Smart, B. Joseph Schaeff and Peter Silverman; and the deposition testimony of G. Alex Monteith from a court proceeding in Ohio. That action was Ponderosa, Inc. v. Pondco II, Inc., No. 1-87-02867-11 (Bankr.N.D.Ohio). Ponderosa, Inc. was the corporate predecessor of Metromedia Steakhouses, Inc., which is the opposer in the instant opposition proceeding before the Board.

In addition to arguing the preclusive effect of the judgment against applicant in the earlier opposition, opposer asserts that the materials submitted reveal the undisputed fact that at the time Mr. Monteith filed the instant application, he was aware of Ruben Smith's prior use of the word portion of the mark, so that his assertion in the application that he was not aware of anyone with rights in the mark superior to his own constituted fraud.

Opposer's motion for summary judgment is denied. Neither the res judicata ground nor the theory that no disputes exist as to facts material to the fraud ground has merit.

As the Board stated in Treadwell's Drifters Inc. v. Marshak, 18 U.S.P.Q.2d 1318, 1321, (TTAB1990): "Under the doctrine of claim preclusion the entry of a final judgment 'on the merits' of a claim (i.e., cause of action) in a proceeding serves to preclude the relitigation of the same claim in a subsequent proceeding between the parties or their privies, even in those cases where the prior judgment was the result of default."

Res judicata plainly does not preclude applicant from seeking registration of the word and design mark which the instant application seeks to register. Both parties agree that the question before us is whether the Board's entry of judgment sustaining the opposition to the application for the words only should preclude the registration of the mark including both the words and design elements in the instant opposed application. Both parties argue that their positions are supported by Miller Brewing Company v. Coy International Corporation, 230 USPQ 675 (TTAB1986), wherein the Board sustained the opposition based on res judicata. The first opposed application there was for registration of a mark which was different in some respects from the mark opposed in the second proceeding. The Board found that both applications constituted a single transaction or a series of transactions within the meaning of the Restatement (Second) of Judgments (1982); that evidence relating to the claim of likelihood of confusion would be the same in both oppositions; and hence that the judgment in the first proceeding operated as claim preclusion to bar the second application. The Board found that the two marks created "substantially the same commercial impression" (p. 678) and commented that losing parties should not be encouraged to modify their marks insignificantly following an adverse ruling in order to avoid the res judicata effect of the earlier adjudication.

*4 We agree that the principles enunciated in the Miller case control in the case which is before us now. These principles, however, lead to the opposite result when the facts of the instant case are considered. Here the two marks of applicant are clearly too different to be considered a single transaction or a series of transactions within the meaning of the Restatement. They cannot be considered to be the same claim. Here the first mark was only the words, whereas the second incorporates several design elements, including not just the stylized script in which "Ranch" is depicted and the black rectangular design on which "STEAK & SEAFOOD" appear, but also the designs of the cactus, the sun, and the wavy line (below the word "Ranch") which appears to be earth in the foreground of the pictorial scene. When the second mark is compared to the first, this western landscape depiction and the other design elements help create for the second mark a commercial impression which can be argued to be different from that which the words alone create for the first mark. Both applications had been filed long before opposer objected to registration of the first mark. Under these circumstances applicant plainly did not simply change its mark in some insignificant respect in an attempt to avoid the preclusive effect of the adverse judgment as to the first mark. When the second application was filed, the opposition to the first had not yet even been instituted. The evidence relating to the issue of likelihood of confusion with the first mark would not be precisely the same as the evidence with respect to likelihood of confusion with the second mark. Under these circumstances opposer's motion for summary judgment on the basis of res judicata is denied.

Turning to the second ground upon which opposer's motion for summary judgment is based, we find that opposer has not established either that no genuine issues exist regarding the fraud allegation, or that, based on the undisputed facts, opposer is entitled to judgment as a matter of law. Notwithstanding the testimony and admissions of Mr. Monteith that he did know of Mr. Smith's use of the words "RANCH STEAKS & SEAFOOD," there is simply no evidence which could be construed to establish that he knowingly made a false statement or that he intended to procure, by means of fraud, a registration to which he realized he was not entitled. To the contrary, the materials of record in connection with the motion indicate that Mr. Monteith was of the opinion that the rights of Mr. Smith were not superior to his own rights. To prove fraud opposer would have to show that applicant intentionally misrepresented a material fact with the intention of inducing the Office to grant a registration to which applicant knew he was not entitled. Bakaert Steel Wire Corp. v. S.p.A. Officine Maccaferri Gia' Raffaele Maccaferri & Fagli, 196 USPQ 558 (TTAB1977). An applicant's failure to disclose to the Examining Attorney the asserted rights of another person does not amount to fraud unless such other person is known by the applicant to have the right to use a mark which would be likely to cause confusion with the mark shown in the application as applied to the goods set forth in the application. Whether Mr. Monteith was mistaken when he concluded that Mr. Smith did not have superior rights in the mark applicant seeks to register is not determinative. At this stage of this proceeding we simply have no evidence that applicant intentionally misrepresented facts which he understood would otherwise be a proper basis for refusal of his application. This leaves facts material to the issue of fraud in dispute, which in turn necessitates denial of opposer's motion for summary judgment on this ground as well as on the ground of res judicata.

APPLICANT'S MOTION FOR SUMMARY JUDGMENT

*5 Applicant's cross-motion for summary judgment is based on applicant's contention that opposer lacks standing to oppose this application, and on applicant's argument that the undisputed facts establish that applicant is entitled to judgment as a matter of law.

According to applicant, opposer lacks standing because it has not alleged any interest in the outcome of this proceeding beyond that of the general public, in that opposer has not claimed that it will be damaged by registration of the mark in question. Applicant notes that opposer claims that Ruben Smith had prior rights in the words "RANCH STEAKS & SEAFOOD," but applicant argues that opposer cannot assert whatever those rights might be, and that apart from using marks which include the word "STEAK," which is merely descriptive of restaurant services, opposer has not alleged use of any component of applicant's word and design mark, so that opposer has not alleged any factual basis for its contention that it will be damaged by registration of applicant's mark because confusion is likely.

Closely related to this position is applicant's argument that summary judgment in its favor is appropriate because no facts material to the issue of likelihood of confusion are in dispute, and that based on the undisputed facts, the marks are so dissimilar that confusion is not likely as a matter of law.

To the extent that applicant's motion can be considered a challenge to the sufficiency of opposer's pleading under Rule 12(b)(6) of the Federal Rules of Civil Procedure, we hold that opposer's pleading meets the requirements of the rule. Opposer asserts a genuine interest in the outcome of the proceeding by alleging that it is a competitor of applicant in the restaurant business, and that the mark sought to be registered by applicant is likely to cause confusion with opposer's marks. Because the claim of likelihood of confusion is not wholly without merit under the circumstances set forth by opposer, we must consider opposer's pleading to be a sufficient allegation of its standing.

Moreover, there do not appear to be any disputed facts material to the issue of opposer's standing. It is undisputed that opposer and applicant are competitors, and opposer's marks and the services rendered under them have not been put in issue. Accordingly, applicant's motion for summary judgment as to opposer's standing is denied, and opposer is granted partial summary judgment based on the undisputed facts which establish its standing as a matter of law.

This leads us directly into the analysis of applicant's other basis for its motion for summary judgment, which is that no facts material to the issue of likelihood of confusion are in dispute, and that based on the undisputed facts, applicant is entitled to judgment in its favor because confusion is not likely as a matter of law. Applicant argues that even though the services of the parties are the same, confusion is not likely because the marks are not similar. Applicant notes that with the exception of the descriptive word "STEAK," there are no words common to both applicant's mark and any of opposer's marks.

*6 In response, opposer argues that both "BONANZA" and "PONDEROSA" evoke connotations of a ranch because of the use of these words in connection with the well-known series which has appeared on television since 1959. Opposer submitted copies of current programming listings as well as a copy of an entry from a reference work on television shows. This directory provides information about the "Bonanza" program, which is shown to be one of the most popular shows in television history. The materials submitted by opposer note that the setting for the stories featured on the program was the "Ponderosa Ranch," and that sometimes the reruns of "Bonanza" are listed under the title "Ponderosa."

Opposer argues that the words "BONANZA," "PONDEROSA" and "RANCH" "are linked in the public consciousness," and that applicant's choice of the word "RANCH" was "no coincidence." (Brief on applicant's motion, p. 12). Opposer contends that even though applicant is no longer a franchisee of opposer, applicant derived its corporate name, Pondco II, Inc. from the "PONDEROSA" mark, and has continued using both the "PONDEROSA" mark and the "BONANZA" mark in its advertising.

The derivation of applicant's corporate name and the propriety of applicant's references to its former status as a franchisee of opposer have some potential bearing on the issue of applicant's intent in adopting its mark, but that issue cannot be resolved as a matter of law at this juncture based solely on opposer's accusations in this regard. Applicant's intent when it adopted its mark is, therefore, a genuine issue of fact requiring trial.

With respect to the marks of the parties, applicant has shown that the marks in issue are not in dispute and has argued that they are so dissimilar that confusion is unlikely as a matter of law. In response, opposer has conceded that its pleaded marks do not resemble applicant's mark in appearance or when they are pronounced, but claims that they are "linked" because of public awareness of the referenced television program. We find that there exist genuine issues concerning whether the marks and the various elements of which they are composed are so similar in suggestion or connotation that these marks, in their entireties, are likely to be confused. These issues, too, require trial.

In summary, opposer's motion to amend its pleading is granted; opposer's motion for summary judgment is denied; and applicant's motion for summary judgment on the issues of standing and likelihood of confusion is denied. Opposer is granted partial summary judgment as to its standing. Accordingly, the opposition will go forward on the claims of fraud and likelihood of confusion in accordance with the attached trial order.

J.D. Sams

R.F. Cissel

T.J. Quinn

Members, Trademark Trial and Appeal Board

FN1. Serial No. 74/063,193.

FN2. In addition the words "STEAK & SEAFOOD" were disclaimed by this amendment, filed January 18, 1991.

FN3. Recorded in the PTO on February 1, 1991.

[Attachment]

July 6, 1993

Robert F. Cissel

Member, Trademark Trial and Appeal Board

*7 In accordance with the Trademark Rules of Practice, trial dates are set as indicated below. IN EACH INSTANCE, a copy of the transcript of testimony together with copies of documentary exhibits, must be served on the adverse party WITHIN THIRTY DAYS after completion of the taking of testimony. Rule 2.125.

THE PERIOD FOR DISCOVERY TO CLOSE CLOSED

Testimony period for party in

position of plaintiff to close August 16, 1993

(opening thirty days prior thereto)

Testimony period for party in

position of defendant to close October 15, 1993

(opening thirty days prior thereto)

Rebuttal testimony period to close November 29, 1993

(opening fifteen days prior thereto)

Briefs shall be filed in accordance with Rule 2.128(a) and (b).

An oral hearing will be set only upon request filed as provided by Rule 2.129.